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. e du/thir dc ir c uit_1999/84Filed March 30, 1999

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 98-6276

RIDGEWOOD BOARD OF EDUCATION

v.

N.E., as Guardian Ad Litem for M.E., an infant; MARY E., Individually and as Guardian Ad Litem for M.E., an infant, Defendants/Third-party Plaintiffs

v.

FREDERICK STOKLEY, Superintendent; JOHN CAMPION, Director of Special Programs; CHARLES ABATE, Princi pal; WILLIAM WARD, Principal; LORRAINE ZAK, Psychologist ; KATHLEEN McNALLY, Social Worker; CAROLINE JANOVER, LDT-C; GEORGE NEVILLE, Principal; HENRY HOGUE, Psychologist; JUNE ANN DIBB, Dr., Psychiatrist; JOAN CHRISTIAN, LDT-C; SUSAN LYNAUGH, Psychologist, Third-party Defendants

N.E., as Guardian Ad Litem for M.E., an infant; Mary E., Individually and as Guardian Ad Litem for M.E., an infant, Appellants

On Appeal from the United States District Court for the District of New Jersey
D.C. Civil Action No. 97-cv-02039 (Honorable Nicholas H. Politan)Argued November 4, 1998

Before: SCIRICA and ALITO, Circuit Judges, and GREEN, District Judge*

(Filed March 30, 1999)

REBECCA K. SPAR, ESQUIRE (ARGUED) Cole, Schotz, Meisel, Forman

& Leonard
25 Main Street Hackensack, New Jersey 07601

Attorney for Appellants

CHERIE L. MAXWELL, ESQUIRE (ARGUED) Sills, Cummis, Zuckerman, Radin, Tischman, Epstein & Gross
One Riverfront Plaza Newark, New Jersey 07102

Attorney for Appellees

OPINION OF THE COURT

SCIRICA, Circuit Judge.

I.

The issue on appeal is whether Ridgewood Board of Education provided its student M.E. with a "free appropriate public education" as required by the Individuals with Disabilities Education Act, 20 U.S .C.A. S 1400 et seq. (Supp. 1998). The District Court fou nd the board of education satisfied IDEA because it provid ed M.E.
"more than a trivial educational benefit." Because we hold that IDEA imposes a higher standard, we will vacate and

remand.

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*The Honorable Clifford Scott Green, United States District Judge for the Eastern District of Pennsylvania, sitting by design ation.

2II.

A.

M.E.1 is a seventeen-year old high-school student w hose learning disabilities qualify him as a "child[ ] wi th
disabilities" under the Individuals with Disabiliti es Education Act ("IDEA"), 20 U.S.C.A. S 1400 et seq. (Supp. 1998). M.E. has attended schools in Ridgewood Board of Education's school district since the fall of 1988, when he started second grade at the Orchard School. At the beginning of the second grade, his teacher noticed that his
academic skills were far below those of his classma tes and the school moved him to the first grade. At that ti me, the school told M.E.'s parents that he did not have a l earning disability and was in fact very intelligent.

M.E.'s difficulties continued in the first grade. O n the recommendation of his teacher, his parents enrolled him in summer school. Despite this extra instruction, M.E. 's second grade teacher commented that his skills rema ined very weak. Standardized tests conducted during the second grade confirmed his teacher's assessment: M.E.'s sc ores ranged between the fourth and ninth percentiles. M. E. again attended summer classes on the school's
recommendation.

Hoping that a new school might help their son, M.E. 's parents asked Ridgewood to transfer M.E. to Ridge S chool, another elementary school in the Ridgewood district , for the third grade. But M.E.'s difficulties continued at R idge. As a result, Ridgewood and M.E.'s parents agreed that M. E.
should receive Basic Skills Instruction twice a wee k and
work with his teacher after school twice a week. M. E.'s parents also had M.E. examined by independent learn ing
disabilities teacher consultant Howard Glaser. Glas er's October 1990 evaluation found that there was a grea t discrepancy between M.E.'s intellectual abilities a nd his academic performance: although M.E.'s intelligence was at

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1. M.E.'s claims were brought by M.E.'s father as g uardian ad litem and his mother as guardian ad litem and individually. T o minimize confusion, we also refer to the family as "M.E."

3the ninety-fifth percentile, his reading skills wer e at the

second percentile. Glaser also found that M.E. was learning disabled and recommended that M.E.'s parents ask Ridgewood to evaluate M.E.

Ridgewood's Child Study Team (CST) evaluated M.E. i n March, 1991. The Ridgewood CST agreed with Glaser's assessment that there was a great discrepancy betwe en M.E.'s abilities and his performance in school. It also noted that the discrepancy was growing and that M.E. was becoming very anxious about his academic performanc e. But it refused to classify him as learning disabled because it concluded that he was not "perceptually impaired " within the meaning of New Jersey law.2 The Ridgewood CST recommended that Ridgewood provide M.E. with "incre ased multi-sensory support" and that his parents obtain counseling for him.

M.E.'s academic difficulties continued throughout t he remainder of elementary school. In fifth grade, M.E .'s teacher and his parents asked Ridgewood to evaluate him again. Ridgewood refused to do so. In sixth grade, Ridgewood agreed to re-evaluate M.E. only after a l earning disabilities teacher consultant hired by M.E.'s par ents recommended it do so. The Ridgewood CST's May-June
1994 evaluations consisted of an educational assess ment, a psychological assessment, a health appraisal and a psychiatric evaluation. The CST concluded that M.E.
remained far behind his classmates and recommended that he and his parents seek counseling to explore his f eelings of inadequacy and depression. But the CST maintaine d that M.E showed no signs of perceptual deficits, again r efused to classify him as perceptually impaired and determine d that he was not eligible for special education.

M.E.'s in-class troubles worsened during the sevent h

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2. N.J. Admin. Code tit. 28, S 6:28 (1991) defines "perceptually impaired" as "a specific learning disability manifested in a disorder in understanding and learning, which affects the abili ty to listen, think, speak, read, write, spell and/or compute to the ext ent that special education is necessary for achievement in an educat ional program." New Jersey uses the phrase "perceptually impaired" inst ead of IDEA's phrase "specific learning disabilities."

4grade, where he consistently failed English and rec eived

incompletes in other classes. Concerned that Ridgew ood's CST had erred in failing to classify M.E. as percep tually impaired, M.E.'s parents asked Ridgewood to provide an evaluation by an independent child study team. Afte r the parents filed for an administrative hearing, Ridgew ood agreed to the request and contracted with Bergen Independent Child Study Teams for the evaluation. Ridgewood Director of Special Programs John Campion ordered Bergen not to recommend whether M.E. should be classified as perceptually impaired or how he shoul d be educated. M.E.'s parents strongly disagreed with th ese limitations and asked the Parent Information Center of New Jersey to intervene. After the Parent Information C enter determined that Bergen could make classification an d placement recommendations, Bergen agreed to make th ese recommendations in the final team report it would p rovide to Ridgewood but not in the preliminary evaluation reports individual team members would prepare.

Bergen's team staffing report diagnosed M.E. with a learning disability in reading and writing and reco mmended that Ridgewood classify him as perceptually impaire d. M.E.'s parents allege that Ridgewood intentionally withheld this report from them despite their repeated reques ts and that Ridgewood gave them the team staffing report o nly after the New Jersey Department of Education ordere d it to

do so.

On March 17, 1995, Ridgewood agreed to classify M.E . as perceptually impaired. It recommended that he conti nue in the Basic Skills Instruction he had been receiving for six years and developed an individualized education pro gram (IEP) for the 1995-96 school year. The IEP called f or thirty minutes of individual Orton Gillingham3 instructio n in reading and spelling, resource center instruction i n English

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3. The Orton-Gillingham technique is a "linguistic- phonetic approach [towards reading] with an emphasis on teaching the student to learn how to decode words." Wall v. Mattituck-Cutchogue Sch. Dist., 945 F. Supp. 501, 505 n.4 (E.D.N.Y. 1996). It is designed to "en hance a dyslexic individual's capacity to read, write, and spell." P ascoe v. Washingtonville Cent. Sch. Dist., 1998 WL 684583, at *1 (S.D.N.Y. S ep. 29, 1998).

5and supplementary instruction in science and social

studies. M.E.'s parents maintain they objected to t he IEP and allege that Ridgewood coerced them to agree to it by threatening to break off all discussions concerning M.E.'s educational program unless they approved the IEP. T he IEP proved ineffective. M.E. made minimal improvements and Ridgewood changed his grades to pass-fail in order to minimize the impact on his self-esteem.

At the end of the eighth grade, Ridgewood decided t hat M.E. should no longer be placed in regular classes. For the 1996-97 school year, it proposed an IEP that provid ed for
resource center instruction in all academic classes , two daily periods of supplementary instruction with a t eacher trained in the Wilson reading program and speech/language therapy once a week. It also schedu led regular classroom instruction for physical educatio n and electives. M.E.'s parents disagreed with the IEP, c laiming it provided fewer services than his inadequate 1995-96 IEP and arguing it would stigmatize M.E., damaging his already-fragile self-esteem. On May 27, 1996, M.E.' s parents requested a due process hearing before the New Jersey Department of Education, contending that Ridgewood's proposed IEP for 1996-97 failed to prov ide a "free appropriate public education" within the mean ing of IDEA and requesting that M.E. be placed in private school at Ridgewood's expense. Concerned that Ridgewood wo uld not provide their son an adequate education, M.E.'s parents began to visit other schools and eventually asked Ridgewood to place M.E. at the Landmark School, a p rivate school in Massachusetts that specializes in educati ng students with learning disabilities. After Ridgewoo d refused their request, M.E.'s parents then asked that Ridge wood pay for him to attend Landmark's summer program. Af ter Ridgewood refused, M.E. attended Landmark's summer program at his parents' expense and, according to h is instructors there, made steady and considerable pro gress.

B.

While M.E. was at Landmark, an Administrative Law Judge conducted seven days of hearings on his paren ts' complaint. In the fall of 1996, M.E. returned to Ri dgewood

6to begin ninth grade. On November 27, 1996, the ALJ held

that Ridgewood's 1996-97 IEP failed to provide M.E. with a free appropriate public education. In arriving at t his conclusion, she considered the testimony of M.E.'s parents, Howard Glaser, Dr. Mae Balaban of Bergen, M.E.'s classroom teachers and the Ridgewood CST. She also considered a letter written by Dr. Balaban on Novem ber 4, 1996, over a month after the last hearing. In that letter, Dr. Balaban criticized the 1996-97 IEP, stating that sh e was "convinced that [it] will not result in . .. an ade quate education." She strongly recommended that M.E. be p laced at Landmark, where he would "be given the chance to develop at least average reading and writing skills so as to
become a functional adult."

The ALJ then ordered Ridgewood to pay M.E.'s tuitio n at Landmark, holding such a placement is warranted whe n"it is shown that it is not appropriate to provide educ ational services for the pupil in a public setting." Conclu ding that M.E.'s Landmark placement would remain appropriate until Ridgewood "offers an appropriate program and placem ent", the ALJ nonetheless refused to order Ridgewood to p ay for the non-tuition costs of the Landmark placement. Th e ALJ also denied M.E.'s request for compensatory educati on, finding that Ridgewood's failure to classify M.E. a s disabled did not rise to the required level of bad faith or willful misconduct. Finally, the ALJ concluded that M.E. wa s entitled to reimbursement for the tuition costs of attending Landmark's summer program in 1996.

C.

On January 20, 1997, pursuant to the ALJ's decision
, M.E. enrolled in Landmark at Ridgewood's expense. I n April 1997, Ridgewood filed a complaint in federal court under 20 U.S.C.A. S 1415(i)(2) (1998), an action that had the effect of appealing the ALJ's decision. M.E. brought a counterclaim seeking compensatory education and the nontuition costs of attending Landmark. He also filed a thirdparty complaint against various Ridgewood administr ators and child study team members, alleging violations o f IDEA, the Rehabilitation Act of 1973, 29 U.S.C. S 701 et seq., 42 U.S.C. S 1985(3), 42 U.S.C. S 1983, New Jersey stat e law

7and the United States Constitution and seeking

compensatory and punitive damages under 42 U.S.C.

S 1983.

On July 30, 1998, the District Court reversed the A LJ's decision that Ridgewood had not provided M.E. a fre e appropriate education. The District Court also held that the
ALJ should not have considered Dr. Balaban's Novemb er 4, 1996 letter because Ridgewood never consented to it s admission and because Ridgewood had not been given a "full and fair opportunity" to cross-examine Dr. Ba laban on the portions of the letter that contradicted her li ve testimony before the ALJ.

In finding that Ridgewood had provided M.E. a free appropriate public education, the District Court st ated that IDEA requires only that an IEP provide a disabled s tudent with "more than a trivial educational benefit" and, relying on the testimony of Ridgewood's witnesses and Dr. Balaban, concluded that Ridgewood's IEP had done so . The
District Court found that Dr. Balaban never charact erized M.E.'s IEP as "inappropriate" but testified that th e IEP would provide M.E. with an educational benefit.

Because it reversed the ALJ's determination that Ridgewood had not provided M.E. a free appropriate public education, the District Court also reversed the ALJ 's decision that Ridgewood pay M.E.'s tuition at Landm ark, stating that even if M.E.'s IEP were inappropriate, no evidence suggested that he could not be educated in a public setting.

The District Court affirmed the ALJ's decision to d eny M.E. compensatory education and reimbursement for tutoring expenses. It rejected the ALJ's conclusion that compensatory education requires bad faith, stating our opinion in Carlisle Area School District v. Scott P ., 62 F.3d 520 (3d Cir. 1995) established the right to compens atory
education once the school district knows or should have
known its IEP has failed. But the District Court he ld M.E. had no right to compensatory education because M.E. 's IEP had not been a failure. At the same time, the Distr ict Court dismissed M.E.'s request for expenses and costs in the administrative proceedings because M.E. was no long er the prevailing party.

8The District Court also granted Ridgewood summary

judgment on M.E.'s third-party complaint seeking compensatory and punitive damages under 42 U.S.C.
S 1983. M.E.'s S 1983 claims asserted violations of S 504 of the Rehabilitation Act of 1973, the equal protectio n clause of the Fourteenth Amendment, 42 U.S.C. S 1985 and I DEA.
The District Court dismissed M.E.'s S 504 claims be cause he had not demonstrated he was " `excluded from participation in, denied the benefits of, or subjec t to discrimination at, the school' " and dismissed his S 1985 claim because he had not shown that the alleged vio lation of his rights was motivated by "racial or `otherwis e classbased' animus." It dismissed M.E.'s IDEA claims bec ause it determined Ridgewood had fully complied with IDEA. In addition, the District Court held all of M.E.'s thi rd-party claims failed "to overcome the qualified immunity e njoyed by municipal employees sued in their individual cap acity."

M.E. appealed to this court on August 26, 1998. Bef ore we heard argument, the District Court on September 1, 1998 enjoined implementation of its July 30 order, an act that kept M.E. enrolled in Landmark at Ridgewood's expense. On September 9, a motions panel of this co urt stayed the District Court's September 1 order, whic h effectively reinstated the District Court's July 30 order. But M.E. remained at Landmark pursuant to an agreement between his parents and the school. At oral argumen t on November 4, 1998, M.E. asked this panel to require Ridgewood to pay his Landmark expenses. After oral argument, we ordered Ridgewood to comply with the District Court's September 1 order and pay M.E.'s t uition, residential and transportation costs at Landmark. M .E. remains at Landmark at the present time.

III.

A.

The initial question is whether the District Court erred in deciding that Ridgewood's 1996-97 IEP provided M.E. with a free appropriate education.4 We review the grant of

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4. In his brief, M.E. contends the District Court a pplied an improper
standard of review to the ALJ's decision that his 1 996-97 IEP was

9summary judgment under a plenary standard. See In r e

Chambers Dev. Co., 148 F.3d 214, 229 n.12 (3d Cir. 1998).

Congress enacted the Individuals with Disabilities Education Act ("IDEA"), 20 U.S.C.A. S 1400 et seq., to assist states in educating disabled children. In order to receive funding under IDEA, a state must provide all disabl ed students with a "free appropriate public education. " 20 U.S.C.A. S 1412(1) (Supp. 1998).5 This education m ust be tailored to the unique needs of the disabled studen t through an individualized educational program ("IEP "). See Board of Educ. v. Rowley, 458 U.S. 176, 181-82 (198 2).

IDEA leaves to the courts the task of interpreting "free appropriate public education." See Rowley, 458 U.S. at 188-89. The Supreme Court began this task in Board of Education v. Rowley, 458 U.S. 176 (1982), holding t hat while an IEP need not maximize the potential of a d isabled student, it must provide "meaningful" access to edu cation, id. at 192, and confer "some educational benefit" u pon the child for whom it is designed. Id. at 200. In deter mining the quantum of educational benefit necessary to satisfy IDEA, the Court explicitly rejected a bright-line rule. N oting that children of different abilities are capable of grea tly different achievements, the Court instead adopted an approach that requires a court to consider the potential of the p articular disabled student before it. See id. at 202; see als o Hall v. Vance Cty. Bd. of Educ., 774 F.2d 629, 635 (4th Cir . 1985) (stating that Rowley holds that "no single substant ive
standard can describe how much educational benefit is sufficient to satisfy [IDEA]").

We first interpreted the phrase "free appropriate p ublic

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inappropriate. Because we will vacate the District Court's judgment that the IEP was appropriate, we need not determine whet her the District Court applied the proper standard of review to the ALJ's decision.

5. IDEA defines "children with disabilities" as chi ldren who need special education because of "mental retardation, hearing i mpairments including deafness, speech or language impairments, visual im pairments including blindness, serious emotional disturbance, orthopedi c impairments, autism, traumatic brain injury, other health impair ments, or specific learning disabilities." 20 U.S.C.A. S 1401(a)(1)(A) (i) (Supp. 1998).

10education" in Board of Education v. Diamond, 808 F. 2d 987

(3d Cir. 1986), when we rejected the notion that th e provision of any educational benefit satisfies IDEA , holding that IDEA "clearly imposes a higher standard." Id. at 991. Examining the quantum of benefit necessary for an I EP to satisfy IDEA, we held in Polk v. Central Susquehann a Intermediate Unit 16, 853 F.2d 171 (3d Cir. 1988), that
IDEA "calls for more than a trivial educational ben efit" and requires a satisfactory IEP to provide "significant learning," id. at 182, and confer "meaningful benefit." Id. at 184. We also rejected the notion that what was "appropriate " could be reduced to a single standard, id., holding the b enefit "must be gauged in relation to the child's potentia l." Id. at 185. When students display considerable intellectua l potential, IDEA requires "a great deal more than a negligible [benefit]." Id. at 182.

As noted, the District Court held that an IEP need only provide "more than a trivial educational benefit" i n order to be appropriate, equating this minimal amount of ben efit with a "meaningful educational benefit." But the st andard set forth in Polk requires "significant learning" a nd "meaningful benefit." The provision of merely "more than a
trivial educational benefit" does not meet these st andards.

It appears also that the District Court may not hav e given adequate consideration to M.E.'s intellectual poten tial in arriving in its conclusion that Ridgewood's IEP was appropriate. Although its opinion discussed the IEP in considerable detail, it did not analyze the type an d amount of learning of which M.E. is capable. As we have di scussed, Rowley and Polk reject a bright-line rule on the am ount of benefit required of an appropriate IEP in favor of an approach requiring a student-by-student analysis th at carefully considers the student's individual abilit ies.

Therefore we will vacate the judgment of the Distri ct Court on this issue and remand for proceedings cons istent with this opinion.6

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6. We see no error in the District Court's decision to strike Dr.

Balaban's November 4, 1996 letter for the reasons stated by t he District Court.

11B.

Because we have vacated the District Court's judgme nt that Ridgewood provided M.E. with a free appropriat e public education, we must review all the judgments that flow from it, specifically, that M.E. was not entit led to placement at Landmark, that he was not entitled to compensatory education, that he was not entitled to expenses and costs as the prevailing party at the administrative hearing and that he could assert no thirdparty claims under 42 U.S.C. S 1983.

1. Placement at Landmark

The District Court held that Ridgewood was not requ ired to pay M.E.'s tuition at Landmark for the 1996-1997 school year because his IEP had provided him a free approp riate public education. But even if M.E.'s IEP were inapp ropriate,
the District Court said there was no "evidence in t he record suggesting that it is not appropriate to provide ed ucational services for [M.E.] in a public setting." M.E. cont ends the District Court's approach requires a student seekin g private placement to show not only that private placement i s appropriate but also that all public placements are inappropriate. This approach, he argues, places an impossible burden on the student. We are not convin ced that M.E. correctly interpreted the District Court' s holding. Nonetheless, we do not believe that IDEA requires t he student to prove that all public placements are inappropriate.

To determine when a disabled student is entitled to a private placement, we look to Florence County Schoo l District Four v. Carter, 510 U.S. 7 (1993), in whic h the Supreme Court held that a student may be entitled t o reimbursement if "a federal court concludes both th at the public placement violated IDEA and that the private school placement was proper under [IDEA]." Id. at 15. Unde r Florence County, a court may award a disabled stude nt the cost of his private placement if (1) the court dete rmines the student's IEP is inappropriate and (2) the student demonstrates that the private placement he seeks is proper. See Walczak v. Florida Union Free Sch. Dist., 142 F .3d 119,

12129 (2d Cir. 1998).7 A private placement may be pro per if

it is appropriate and provided in the least restric tive
educational environment. See Oberti v. Board of Edu c., 995 F.2d 1204, 1213 (3d Cir. 1993). To meet the Florenc e County standard, a disabled student is not required to demonstrate that he cannot be educated in a public setting. Under IDEA, the relevant question is not whether a student could in theory receive an appropriate education in a public setting but whether he will receive such an educati on. We
note the ALJ concluded that Landmark would remain appropriate until Ridgewood offered an appropriate IEP.

Ridgewood contends that the "least restrictive educ ational environment" requirement bars M.E. from attending Landmark because Landmark's residential program is more restrictive than Ridgewood's. Under this approach, M.E. could receive an inappropriate education in Ridgewo od's schools but be denied a private placement because i t is more restrictive than placement in a Ridgewood publ ic school. But IDEA requires that disabled students be educated in the least restrictive appropriate educa tional environment.8 See Oberti v. Board of Educ., 995 F.2 d 1204, 1213 (3d Cir. 1993) (stating that IDEA requires an education to be appropriate and provided in the lea st restrictive educational environment); Kruelle v. Ne w Castle Cty. Sch. Dist., 642 F.2d 687, 695 (3d Cir. 1981) ( stating that inappropriate educational environments are not relevant for "least restrictive environment" analys is); see also Cleveland Heights-University Heights City Sch. Dist. v. Boss, 144 F.3d 391, 400 (6th Cir. 1998) (holding th at private school's failure to satisfy least restricti ve environment requirement does not bar parents' claim for

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7. We note that the District Court has the discreti on to determine the appropriate amount of reimbursement. See Florence C ounty, 510 U.S. at 16 (stating that reimbursement is equitable relief to be awarded after consideration of all relevant factors). For example , the student cannot receive total reimbursement if the fees of the priv ate school are

unreasonable.

8. We also note that the appropriateness of a priva te placement is evaluated by the same standard set forth in part II I.A. of this opinion.

In other words, parents of a disabled student need not seek out the perfect private placement in order to satisfy IDEA.

13reimbursement); Board of Educ. of Murphysboro v. Il linois

Bd. of Educ., 41 F.3d 1162, 1168 (7th Cir. 1994) (s tating that the least restrictive environment requirement" was not developed to promote integration with non-disabled peers at the expense of other IDEA educational requirements" and does not apply unless education is appropriate).

We are unable to determine if the District Court ap plied this standard in concluding M.E. was not entitled t o placement at Landmark and therefore will remand thi s issue to the District Court for reconsideration.

2. Compensatory Education

Under IDEA, a disabled student is entitled to a fre e appropriate public education until the student reac hes age twenty-one. See 20 U.S.C.A. S 1412(2)(B). An award of compensatory education allows a disabled student to continue beyond age twenty-one in order to make up for the earlier deprivation of a free appropriate public ed ucation. See M.C. v. Central Reg. Sch. Dist., 81 F.3d 389, 3 95 (3d Cir. 1996). In Carlisle Area School District v. Sco tt P., 62 F.3d 520 (3d Cir. 1995), we declined to state a pre cise standard for the award of compensatory education, b ut noted that most of our cases awarding compensatory education involve egregious circumstances or the fl agrant failure to comply with IDEA. Id. at 536-37. One yea r later, in M.C. v. Central Regional School District, we "fl esh[ed] out the standard left sparse by Carlisle" and held that the right to compensatory education accrues when the school k nows or should know that its IEP is not providing an app ropriate education. See M.C., 81 F.3d at 396. We specificall y rejected a bad faith or egregious circumstances sta ndard, stating that "a child's entitlement to special educ ation should not . . . be abridged because the [school] d istrict's
behavior did not rise to the level of slothfulness or bad
faith." Id. at 397.

Applied narrowly, M.C.'s "inappropriate IEP" requir ement might prohibit the award of compensatory education for years in which a disabled student received an inapp ropriate
education via means other than an IEP.9 But we do not

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9. In M.C., we stated that "the right to compensato ry education should accrue from the point that the school district know s or should know of

14think the M.C. court intended such an application b ecause

it held the denial of an appropriate education--and not merely the denial of an appropriate IEP--creates th e right to compensatory education. See M.C., 81 F.3d at 391 -92 ("A
school district that knows or should know that a ch ild has an inappropriate [IEP] or is not receiving more tha n a de minimis benefit must, of course, correct the situat ion. We
hold that . . . a disabled child is entitled to com pensatory education for a period equal to the deprivation."); id. at 395 (citation omitted) ("Under IDEA, a disabled student is entitled to free, appropriate education until he or she reaches age twenty-one. A court award of compensato ry education requires a school district to . . . make up for any earlier deprivation."). IDEA's central goal is that disabled students receive an appropriate education, not mere ly an appropriate IEP. Therefore, a disabled student's ri ght to compensatory education accrues when the school know s or should know that the student is receiving an inappr opriate
education.

The District Court rejected M.E.'s request for compensatory education and reimbursement for tutori ng because it believed those remedies were available o nly when an IEP was inappropriate. As noted, it concluded th at M.E.'s 1996-97 IEP was appropriate. M.E. maintains that he never received a free appropriate public educati on from Ridgewood and that he presented substantial evidenc e that Ridgewood knew or should have known he was disabled shortly after he enrolled at the Orchard School in 1988. He
contends that the District Court erred as a matter of law when it dismissed his claim for compensatory educat ion from 1988 to 1997 after a finding that M.E. had rec eived a free appropriate education during the 1996-97 schoo l year. He also contends his parents are entitled to reimbu rsement for $6,400 in tutoring expenses incurred from 1989 to
1992.

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the IEP's failure," M.C., 81 F.3d at 396, and that an "award of compensatory education require[s] a finding that an IEP was inappropriate." Id. at n.6. The M.C. court did not have to consider whether compensatory education was awardable for ye ars in which a disabled student had no IEP because the plaintiff d id not ask for compensatory education for such years.

15Ridgewood responds that M.E. cannot recover

compensatory education because he received a free appropriate public education. It also contends ther e is no evidence of culpable conduct or egregious circumsta nces, asserting it provided M.E. with extensive assistanc e. Further, Ridgewood argues M.E.'s parents' failure t o object to his programs and placements from 1988 to 1996 cr eated "presumptively a free and appropriate education" du ring those years and bars claims for compensatory educat ion. Finally, Ridgewood asserts that all compensatory ed ucation claims involving events that occurred more than two years ago are barred by a two-year statute of limitations adopted by this court in Jeremy H. v. Mount Lebanon School District, 95 F.3d 272 (3d Cir. 1996).

Whether Ridgewood's 1996-97 IEP provided M.E. with an appropriate education will be decided by the Distri ct Court on remand. As we stated in M.C., an award of compensatory education does not require a finding o f bad faith or egregious circumstances. See M.C., 81 F.3d at 397. Furthermore, failure to object to M.E.'s placement does not deprive him of the right to an appropriate educatio n. In M.C., we held that "a child's entitlement to specia l education should not depend upon the vigilance of t he parents." See M.C., 81 F.3d at 396. Finally, Ridgew ood's statute of limitations argument lacks merit and its reliance on Jeremy H. is misplaced. In Jeremy H. we expressl y declined to choose a statute of limitations for IDE A actions, see Jeremy H., 95 F.3d at 280 n.15 ("We . . . need not, and do not, decide between a two-year and a six-year li mitations period."), but decided the limitations period begin s to run "once the state administrative process has run its course." Id. at 280. Also, Jeremy H. considered the appropri ate statute of limitations for IDEA claims brought in Pennsylvania, not New Jersey. See Wilson v. Garcia, 471 U.S. 261, 266-67 (1985) (stating that if a federal statute does not specify a statute of limitations, courts a pply the relevant statute of limitations of the forum state) ; Beauty Time, Inc. v. Vu Skin Sys. Inc., 118 F.3d 140, 144 (3d Cir. 1997) (same); Tokarcik v. Forest Hills Sch. Dist., 665 F.2d 443, 448 (3d Cir. 1981) (same).

In assessing the statute of limitations governing a

16compensatory education claim brought in New Jersey, we

must determine the most analogous cause of action u nder New Jersey law. An analogous cause of action is a " claim[ ] against [a] public entity" alleging "injury or dama ge to person," N.J. Stat. Ann. S 59:8-8, under the New Je rsey Tort Claims Act, in which the statute of limitation s is two years.10 We have previously held that IDEA claims c losely resemble actions to recover damages for injuries ca used by another. See Tokarcik, 665 F.2d at 454. Another ana logous cause of action might be a basic personal injury cl aim, which also carries a two-year statute of limitation s. See
N.J. Stat. Ann. S 2A:14-2.

Because M.E. brought his claim for compensatory education within either statute of limitations, we need not decide whether his claim is more analogous to a Tor t Claims Act claim or a basic personal injury claim. Under either cause of action, the statute begins to run o nce plaintiff 's cause of action accrues. See N.J. Stat . Ann. S 59:8-8; N.J. Stat. Ann. S 2A:14-2. As noted, Jere my H.
held that a federal IDEA claim accrues at the concl usion of the state administrative process. See Jeremy H., 95 F.3d at 280. The limitations period for M.E.'s claim began to run on November 27, 1996, when the ALJ issued her ruling, and M.E. filed his complaint on July 3, 1997.

Therefore we conclude the District Court erred when it dismissed M.E.'s claim for compensatory education f or the years 1988-1996 on a finding that his 1996-1997 IEP was appropriate. The appropriateness of M.E.'s 1996-199 7 education is irrelevant to the appropriateness of h is education from 1988 to 1996.11 In addition, our dec ision to vacate the judgment that M.E.'s 1996-1997 IEP was appropriate compels us to vacate the grant of summa ry

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10. Such a claim must be brought against a "public entity", which includes "any county, municipality, district, publi c authority, public agency and any other . . . public body in the State ." N.J. Stat. Ann. S 59:1-3. Ridgewood meets this definition.

11. Because the dismissal of M.E.'s claim for 1989- 1992 tutoring expenses was also based on the conclusion that the 1996-97 IEP was appropriate, we will vacate the dismissal of tutori ng expenses claim and
remand it to the District Court.

17judgment on M.E.'s claim for compensatory education for

the 1996-1997 school year. On remand, the District Court should determine whether M.E. received an appropria te education in each school year and, if it concludes he did not, determine when Ridgewood knew or should have

known of that fact.

3. Costs and Fees at the Administrative Hearing

A plaintiff may obtain fees and costs when he "prev ails," or obtains merits-based relief that " `materially a lters the legal relationship between the parties by modifying the defendant's behavior in a way that directly benefit s the plaintiff.' " D.R. v. East Brunswick Bd. of Educ., 109 F.3d 896, 902 (3d Cir. 1997) (quoting Farrar v. Hobby, 5 06 U.S. 103, 112 (1992)). The District Court denied M.E.'s request
for costs and fees because its reversal of the ALJ' s decision meant that M.E. was no longer a prevailing party. O ur decision to vacate the District Court's reversal re quires that
we vacate and remand the denial of fees and costs.

4. Third-Party Claims Under 42 U.S.C. S 1983

42 U.S.C. S 1983 does not confer substantive rights but "merely redresses the deprivation of . . . rights. . . created by the Constitution or federal statute." W.B. v. Ma tula, 67 F.3d 484, 493 (3d Cir. 1995). In other words, a S 1 983 suit must allege the violation of a federal right provid ed elsewhere. The District Court granted Ridgewood sum mary judgment on all of M.E.'s third-party claims becaus e it concluded the third-party complaint asserted indivi dual capacity claims against which the third-party defen dants enjoyed qualified immunity. It also held that many of the claims were subject to dismissal on other grounds.

In reviewing the grant of summary judgment, we appl y the same standards as does a District Court. We wil l affirm the grant of summary judgment only if there is no g enuine
issue of material fact and the movant is entitled t o judgment as a matter of law. See Newport Assocs. De v. Co. v. Travelers Indemnity Co., 162 F.3d 789 (3d Cir. 1 998). Once the moving party points to evidence demonstrat ing no issue of material fact exists, the non-moving party has the

18duty to set forth specific facts showing that a gen uine issue

of material fact exists and that a reasonable factf inder
could rule in its favor. See Matsushita Elec. Indus . Co. v. Zenith Radio Corp., 475 U.S. 574 (1986); Groman v. Township of Manalapan, 47 F.3d 628, 633 (3d Cir. 19 95). Speculation and conclusory allegations do not satis fy this duty. Groman, 47 F.3d at 637.

a. Nature of Third-Party Complaint

In order to prevail on a S 1983 suit brought agains t defendants in their official capacity, the plaintif f must establish that the deprivation of his rights was th e result of an official policy or custom. See Board of Cty. Com m'rs v. Brown, 520 U.S. 397, 400 (1997); Monell v. New York City Dept. of Soc. Servs., 436 U.S. 658, 691 (1978).

The District Court held that M.E. provided no evide nce that third-party defendants acted pursuant to a mun icipal policy. M.E. contends his third-party complaint was "clearly brought against third-party defendants in both thei r individual and official capacities" and that the th ird-party defendants acted pursuant to "some policy or custom " of Ridgewood. We disagree. M.E. has provided no eviden ce that Ridgewood's policy is to ignore the responsibi lities imposed by IDEA. Rather the evidence presented was that Ridgewood failed to fulfill its responsibilities. T herefore we will affirm the order of the District Court grantin g summary judgment on this issue.

b. IDEA Claims

Initially we note that the Court of Appeals for the Fourth Circuit recently held that a plaintiff may not sue under 42 U.S.C. S 1983 for IDEA violations because"IDEA prov ides a comprehensive remedial scheme for violations of its own requirements." Sellers v. School Board, 141 F.3d 52 4, 529 (4th Cir. 1998). But we must follow our decision in W.B. v. Matula, 67 F.3d 484 (3d Cir. 1995), which held that IDEA claims may be actionable under S 1983. The District Court entered summary judgment on M.E.'s S 1983 claims alleging IDEA violations because it held Ridgewood had "fully complied" with IDEA. M.E. contends the Distr ict

19Court erred when it entered summary judgment on his

IDEA claims alleging violations from 1988 to Septem ber 1996 on a finding that his 1996-97 IEP was appropri ate. He claims that from 1988 to 1996 Ridgewood failed in i ts obligation to timely evaluate him, to inform his pa rents of their rights and to provide him with special educat ion.

Because the District Court discussed only the 1996- 97 school year, it would appear that the grant of summ ary judgment on M.E.'s IDEA claims was based solely on a finding that the 1996-97 IEP was appropriate. Becau se a satisfactory 1996-97 IEP has no bearing on whether Ridgewood complied with IDEA before the 1996 school year, we will vacate the grant of summary judgment on M.E .'s
IDEA claims.

c. Section 504 Claims

The Rehabilitation Act of 1973, 29 U.S.C. S 701 et seq. (Supp. 1998), prohibits discrimination on the basis of disability in federally funded programs. In order t o establish a violation of S 504 of the Rehabilitatio n Act, a plaintiff must prove that (1) he is "disabled" as d efined by the Act; (2) he is "otherwise qualified" to partici pate in school activities; (3) the school or the board of e ducation receives federal financial assistance; and (4) he w as excluded from participation in, denied the benefits of, or subject to discrimination at, the school. W.B. v. M atula, 67 F.3d 484, 492 (3d Cir. 1995) (quoting Nathanson v. Medical Coll. of Pennsylvania, 926 F.2d 1368, 1380 (3d Cir. 1991)). In addition, the plaintiff must demonstrate that de fendants know or should be reasonably expected to know of hi s disability. See id. But a plaintiff need not prove that
defendants' discrimination was intentional. See id. We have held that there are few differences, if any, betwee n IDEA's affirmative duty and S 504's negative prohibition a nd have noted that the regulations implementing S 504 requi re that school districts "provide a free appropriate educat ion to each qualified handicapped person in [its] jurisdic tion." Id.

at 492-93.

The District Court granted Ridgewood summary judgment on M.E.'s S 504 claim[s] because it found "no

20evidence . . . that M.E. `was excluded from partici pation in,

denied the benefits of, or subject to discriminatio n' " at Ridgewood schools. M.E. argues that Ridgewood viola ted S 504 when it failed to identify him as learning di sabled, when it failed to inform his parents of Ridgewood's IDEA responsibilities and when it failed to provide him a free appropriate public education.

We believe M.E. has presented evidence demonstratin g that a genuine issue of fact exists. In W.B. v. Mat ula, we held that a school's failure to notify parents of i ts IDEA duties could violate S 504, see Matula, 67 F.3d at 501 n.13, and also held that S 504 imposes a "childfind" duty , or the duty to identify a disabled child "within a reasona ble time
after school officials are on notice of behavior th at is likely to indicate a disability." Id. at 500-01. In additi on, the failure to provide a free appropriate public educat ion
violates IDEA and therefore could violate S 504. Se e id. at 492-93 (stating that IDEA and S 504 impose nearly identical duties and noting that S 504's implementi ng regulations require that schools provide a "free ap propriate public education"). Therefore we will vacate the Di strict Court's grant of summary judgment on M.E.'s S 504 c laims and remand for proceedings consistent with this opi nion.12

d. Section 1985 Conspiracy Claim

42 U.S.C. S 1985(3) prohibits conspiracies predicat ed on "racial, or perhaps otherwise class-based, invidiou sly discriminatory animus." Griffin v. Breckenridge, 40 3 U.S. 88, 102 (1971). In order to state a claim under 42 U.S.C. S 1985(3), the plaintiff must allege "(1) a conspir acy; (2) motivated by a racial or class based discriminatory animus

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12. M.E.'s S 504 claims assert both procedural and substantive violations. In a footnote, the District Court state d "[t]he ALJ determined that [Ridgewood] had complied with IDEA's procedura l requirements. This Court finds that the ALJ's conclusion is suppo rted by a preponderance of the evidence in the record." We do not read the ALJ's opinion as finding that Ridgewood complied with IDE A's procedural requirements. The ALJ merely concluded that any pro cedural violations
did not involve bad faith. We do not think this con clusion supports a finding that Ridgewood complied with IDEA's procedu ral requirements.

21designed to deprive, directly or indirectly, any pe rson or

class of persons . . . [of] the equal protection of the laws; (3) an act in furtherance of the conspiracy; and (4) an injury to person or property or the deprivation of any right or privilege of a citizen of the United States." Lake v. Arnold, 112 F.3d 682, 685 (3d Cir. 1997). In Lake, we held that the mentally retarded are a class protected by S 1985(3 ), but we expressly declined to make this determination with respect to handicapped persons. See id. at 685-86 & n.5.

The District Court granted summary judgment on M.E. 's S 1985 claim because it found no evidence that sugg ested the alleged violation of M.E.'s rights was motivate d by racial or "otherwise class-based" animus. We agree. Even w ere we to decide that S 1985 protects the disabled in gene ral, there is no evidence that Ridgewood's alleged actions wer e motivated by discriminatory animus towards the disa bled.

e. Section 1983 Conspiracy Claim

Count Seven of M.E.'s complaint also alleges a S 19 83- only conspiracy. In order to prevail on a conspirac y claim under S 1983, a plaintiff must prove that persons a cting under color of state law conspired to deprive him o f a federally protected right. See Dennis v. Sparks, 44 9 U.S. 24, 29 (1980); Lake v. Arnold, 112 F.3d 682, 689 (3d Ci r. 1997). Unlike S 1985(3), a S 1983 conspiracy claim does not require that the conspiracy be motivated by invidio us discrimination.

We will affirm the grant of summary judgment on thi s claim. M.E. has not demonstrated that a genuine iss ue of material fact exists. At most he has supplied ambig uous allegations and vague inferences that cannot defeat summary judgment. See Groman, 47 F.3d at 633.

f. Qualified Immunity

A municipal official sued in his individual capacit y enjoys qualified immunity if his conduct "does not violate clearly established statutory or constitutional rights of w hich a reasonable person would have known." W.B. v. Matula , 67 F.3d 484, 499 (3d Cir. 1995) (quoting Harlow v. Fit zgerald,

22457 U.S. 800 (1982)). To defeat qualified immunity in an

IDEA action, the plaintiff must show that " `the pa rticular actions taken by defendants were impermissible unde r law established at that time.' " Matula, 67 F.3d at 500 (quoting P.C. v. McLaughlin, 913 F.2d 1033, 1040 (2d Cir. 19 90)). We review the grant of qualified immunity de novo. See Torres v. McLaughlin, 163 F.3d 169, 170 (3d Cir. 1998).

The District Court held that the third-party defend ants could assert qualified immunity because there was n ot
"even a scintilla of evidence from which a reasonab le factfinder could infer that the third-party defendants violated M.E.'s clearly established federal rights". Because we addressed qualified immunity in IDEA claims in W.B. v. Matula, 67 F.3d 484 (3d Cir. 1995), we will vacate and remand so that the District Court may reconsider it s decision in light of Matula.

g. State Law Claims

The District Court dismissed M.E.'s state law claim s alleging violations of the New Jersey Law Against Discrimination and the New Jersey Constitution's guarantee of a thorough and efficient education bec ause it determined third-party defendants enjoyed qualified immunity. Because we have vacated the decision that thirdparty defendants enjoy qualified immunity, we will vacate
the dismissal of M.E.'s state law claims.

IV.

For these reasons, the judgment is affirmed in part and vacated and remanded in part.

A True Copy:

Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

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